Tag: Technical analysis

Getting The Best Forex System

The foreign exchange market, better known as Forex market, is very lucrative. It involves trading currencies in a bid to make profits from the ever fluctuating exchange rates. In order to cash in on this market, one has to employ the best Forex system. Traders have to use technical analysis to make trading decisions. This normally involves studying combinations of price action and technical indicators that are supplied by trading software and charting websites. Forex robots are able to automatically make trades based on these technical analysis techniques. Forex Bots

There are many Forex robots available in the market. Therefore, it is up to a trader to find the best one. It is only through doing so, that one can make the most out of the market.

The Forex Growth Bot EA is one of the best trading systems that are being marketed online. Many people who have used this bot have succeeded in the market. This is due to some of the unique features of the bot, such as low lot sizes, low risk, high reward trades and low drawdowns.

Using the Forex Growth Bot EA, one is able to protect his or her capital from being wiped out. This is because this bot mainly focuses on risk and money management. Moreover, it has many useful features that come in handy when trading. Therefore, one does not have to be vigilant at all times in order to protect his or her investment. The bot does that for him or her.

5 Forex Trading Strategies

If you’re new to trading currencies online and unsure where to start, it helps to understand popular forex trading strategies. Forex comparison site ForexBrokersAZ.com discusses 5 Forex trading styles in detail.

Scalping

Scalping involves buying and selling currency pairs online in small high frequency trades.

It’s designed to capitalize on small changes in exchange rates typically between 5 and 15 pips. A scalper can spend hours on end monitoring the markets, pushing trades through within minutes of closing a previous trade. The best trade opportunities arise when the foreign exchange markets become active – typically around news events, data releases or when trading sessions overlap across international markets.

Stock chart showing levels of support (4,5,6, 7, and 8) and resistance (1, 2, and 3); levels of resistance tend to become levels of support and vice versa. (Photo credit: Wikipedia)

Make no mistake, scalping isn’t for Forex trading beginners. It requires a strong understand of the Forex markets and a clear view on where the markets are going. For this reason, scalpers usually trade with brokers that offer Electronic Communication Networks – also known as ECN brokers – because these brokers deliver faster execution and can provide insights into where the markets are heading through ‘Depth of Market’ (DoM) tools. DoM sounds technical but it’s nothing more than a window onto the orderbook, with volume and price information about buy and sell orders.

Day trading

Day trading involves opening and closing a Forex trading position on the same day – before 5pm New York time. The best day trading opportunities arise over the course of the European and US sessions. Liquidity reaches its peak when these sessions overlap.

Day trading opportunities can be found using intra-day charts with medium timeframes ranging anywhere from 15 to 30 minutes to 1 to 2 hours. Most day traders perform technical analysis on charts to identity support and resistance levels and other patterns.

If this is your preferred trading style, you’ll want to familiarize yourself with the MetaTrader 4 (MT4) platform. It comes loaded with of indicators you can use to perform technical analysis. Click here for Forex brokers that support the MetaTrader 4 platform.

Swing trading

Swing trades unravel over a longer period of time, typically 2 to 5 days with a view to make a 100 to 250 pip mark-up. Swing traders uncover trading opportunities through charts, using technical analysis to identify support and resistance levels and other patterns in the data.

Position trading

Positing traders have an even longer investment horizon: they typically keep their positions open anywhere between 5 and 50 days with a view to make a 250 to 1,000 pip profit. This is where the frontier between technical and fundamental analysis blurs as position traders can use both tactics to uncover trade ideas.

Value investing

Last but not least, value investors such as Warren Buffet or Benjamin Graham have a long term investment horizon. They can hold their positions anywhere from 1 month to several years if they spot a long term trend. Value investors can use both fundamental and technical analysis to identify potential trade ideas. However, longer term considerations such as economic imbalances, interest rate differentials and geo-political considerations often come into play.

The best practices in commodities trading are designed to promote professionalism in investment to the letter. Some of the basic ideas that have made investors on commodities very successful all aim at one simple thing – to prevent loss. If at all you can be able to prevent losing then you can stand to be counted as a very good commodities trader even if you do not make profit. Surprisingly, the best practices in trading commodities are very simple to adhere to and they are indeed very effective. The following are some of the tips.

Live within your means

As much as ambition in financial trading is part and parcel of the success story of any investor, there has to be some moderation on how you invest your money. It is very important to make sure that the commodity you are trading or have chosen to trade on is affordable on your part. The use of leverage particularly for risk averse investments has detrimental consequences if things go wrong for you.

Be financially technical when making investment decisions

The process of trading commodities is technical financially and every decision that you make should be based on informed financial principles and concepts. Technical analysis of the market is also very significant in making informed investment decision. There are a lot of ways that you can use to analyze the market technically but in most cases it is widely advised that you explore the service of a financial expert on the same.

Trade with your mind and not your heart

Objective trading is one that is driven fundamentally by facts and realities of the financial environment in which you are trading your commodities. The need to remain stable in your trade endeavors is very significant in informing whether you will make any gains or not. Before you participate in any investment you need to analyze the factors very objectively and reduce any chance your decision is clouded by your current emotions or the emotions of others.

Find a good brokerage company

The broker is basically the intermediary between the market and the trader and the significant role played by the broker in making sure that success is realized in commodities trading is a well documented fact. The best approaches in getting the best brokers are all based on a good and objective-based analysis of the available provider to determine who will suit your investment ambitions and plans be

Michael Hastings is an editor at How to Trade Commodities where he specializes in gold and Silver Trading. learn more